Determinants of International Trade in Nigeria

Abstract

Nigeria’s persistent trade deficit has informed research curiosity among scholars to carry out empirical study on international trade. This study therefore examines the determinants of international trade in Nigeria from 1999-2022 using Ordinary Least Square (OLS) technique method. All data used are secondary time series data obtained from the Statistical Bulletin of Central Bank of Nigeria (CBN) and National Bureau of Statistics (NBS) annual publications and World Bank DataBank. In executing the study, the OLS techniques was applied after determining stationarity of our variables using the ADF Statistic. It was discovered that the variables are stationary. From the result of the OLS, it is observed that adequate infrastructure and exchange rate have a positive impact on international trade in Nigeria. On the other hand, import tariff, cost of doing business and inflation has a negative impact on international trade in Nigeria. The study therefore recommends among others that: the government should investment in Infrastructural Development with focus on power, transportation, and gas and technology infrastructure. This is important because it forms the bedrock that drives the capacity of an economy to thrive. The government should use the instrument of tariffs and quotas to protect domestic firms and industries. This will help the domestic investments have completive advantage over imported goods.